BANKING ANALYTICS

Ranking of the Azerbaijani banking sector (ranking includes the information component of the banking sector, the main events of the world economy, the analytical review of the main indices of the banks which are being ranked)

Serbs up stakes in Balkan-wide gamble over Kosovo

With its bid to retain Kosovo now a top priority, Serbia is throwing its weight around the Balkans to bolster its position ahead of talks on Monday with leaders of the breakaway province's ethnic Albanian majority.

The clock is ticking for a solution. Mediators from Russia, the United States and European Union have until December 10 to bridge the gulf between a Serb offer of autonomy and Kosovo's demand for independence after eight years of U.N. rule.

Prime ministers and presidents from both sides will be in Vienna on Monday for the fourth meeting since talks began in August, with little hope of compromise.

Russia backs Serbia. The U.S. and most EU states favour giving the Albanians independence, and ending the last open conflict from the Yugoslav wars of the 1990s.

But Belgrade has reached into that same past for ammunition that is testing Western resolve.

In a reminder of Serb influence in the Balkans, nationalist Prime Minister Vojislav Kostunica has for the first time overtly linked Kosovo with Bosnia, backing ethnic Serbs there against reforms they see as an attack on their autonomy and rights.

"Preserving Kosovo and ( Bosnia's autonomous) Serb Republic are now the most important goals of our state and national policy," he said this week.

A Western diplomat said it wasn't the first time Serbia had treated its ethnic kin as pawns, hoping to use Western fears over Bosnia's fragile peace as leverage on Kosovo.

"This might affect some of those in the EU who are so far neutral on Kosovo, scare them," the Belgrade-based diplomat told Reuters. "It could also backfire -- Bosnia is a very emotive word."

Belgrade backed the Bosnian Serbs in their 1992-95 war against Bosnian Muslims and Croats, supplying most of the arms and money that fuelled Europe's worst conflict since World War Two.

That support meant Serbia spent most of the 1990s under sanctions, a pariah state led by autocrat Slobodan Milosevic.

Televised images of the Bosnia carnage also eventually galvanised Western publics and governments. They intervened to stop a repeat in Kosovo in 1999 by sending NATO bombers to expel Serb forces accused of killing civilians in fighting an insurgency.

Kostunica's interjection drew a diplomatic letter of protest from Western embassies, a possible sign of long-term falling out.

"The demarche means Serbia is ... in a confrontation with the international community. The consequence could be isolation," said Dusan Lazic, an analyst with Serbia's top foreign policy forum.

"We're sending the world a message, based on which it can conclude we are still on a path connected to the regime and attitude of Slobodan Milosevic", he told Belgrade's B92 radio.

The timing could hardly be worse. The EU has still not decided if Serbia has shed enough of its nationalist past to be allowed to sign a Stabilisation and Association Agreement, the first step to membership. A progress report is due on Nov 6.

The main condition has been to arrest war crimes suspects indicted by the U.N. tribunal in The Hague, and who are believed to be hiding in Serbia. The tribunal's chief prosecutor Carla del Ponte has said Belgrade's efforts are "not yet sufficient".

Some in the EU favour moving ahead with the accord anyway. The loss of Kosovo without the carrot of EU accession would turn Serbs to nationalism, they argue, creating a Balkan black hole.

Others closer to home think it's time for a reality check.

Slovenia's Jelko Kacin, European Parliament rapporteur for Serbia, said Belgrade should just accept that Kosovo is lost.

"Kosovo has de facto not been a part of Serbia since 1999, end of story," Kacin told Austrian daily Der Standard.

"As soon as it is mature enough to accept Kosovo's independence, Serbia will become the epicentre of positive change ... the engine of the western Balkans". ( Reuters )